No Merger For Harvard Pilgrim, Tufts Health Plan

BOSTON — Two of the state's largest health insurers have called off talks of a merger.

Harvard Pilgrim Health Plan had signed a memorandum of understanding with Tufts Health Plan at the end of January, marking the beginning of a review of the merits of a merger between the two health insurers.

In an email to staff obtained by WGBH, Tufts Health Plan CEO Jim Roosevelt said the review found that the two companies were simply run too differently to merge successfully without an overly time-consuming, costly merger.

"In the process of our six-week review, we determined that our operations are very different and, in many important aspects, not fully compatible without significant changes to existing processes and applications." Roosevelt wrote. "Although we thought the continuation of the process would be positive, ultimately it showed itself to be too complex."

Harvard Pilgrim and Tufts are the state's second- and third-largest health insurers; Merging the two would have created a serious rival for the state's number-one health insurer, Blue Cross Blue Shield. Roosevelt said the two companies will continue to be "strong, respectful comeptitors in the Massachusetts market."